Saturday, July 25, 2009
Bad economic factoid of the week: Vacant housing
According to Bloomberg, there are more than 18 million vacant units of housing in the United States right now. Paul Kedrosky does a little scary numerology:
According to the latest data, the number of vacant U.S. homes touched 18.7-million in the second quarter. That is a daunting figure, of course, but it is more fun to put it in context. Assuming four people per household, the U.S. currently has enough surplus housing to put the entire population of the U.K., with room left over for Israel.
Of course, we are a huge country and they are not, and the linked article notes that the true vacancy rate (all houses empty and for sale) actually fell in the second quarter to 2.5%, down from 2.9% in the six months ended March 30. The aggregate number also includes vacation homes and such, which are rarely used. That does not necessarily indicate trouble; it could just as easily reflect prosperity.
But, even so, point taken.
7 Comments:
By 
Foxfier, at
Sun Jul 26, 02:36:00 AM:
That's pretty cool, actually....
I grew up in a place where about half of the houses are vacation or half-year homes (Methow Valley) so I I gotta agree with the qualifications and all, but that's just *cool* for visualizing how big the US is.
By buck smith, at
Sun Jul 26, 09:05:00 AM:
true vacancy rate (all houses empty and for sale)
That means all houses empty plus all houses for sale, doesn't it? The other interpretation would exclude houses empty but not for sales and houses occupied and for sale.
By Bill C, at
Sun Jul 26, 06:53:00 PM:
Buck,
Banks are sitting on some homes not putting them on the MLS because they don't want to overwhelm the market. I am living next door to one of them. Four houses on my block are empty, three for sale out of a total of 12. Three of the houses, including myself, have been bought since the new year at about 35-40% discounts to what they sold in 2004-2005.
We aren't typical because this is a subdivision built in the exurbs of Il. in 2004 but it does give you an idea of what kind of market is out there. Inventory will fall but it is going to be a few more years. One house across the street is going for 200K, 3500 sq. ft. High taxes and a SSA add significantly to the cost. They account for 42% of the mortgage.
By Foxfier, at
Sun Jul 26, 06:58:00 PM:
Bill C-
SSA? Google fails me, just brings up the social security administration.
By Bill C, at
Mon Jul 27, 08:49:00 PM:
Special supplemental assessment. Developers use the money to build roads, schools, etc.
By 
, at
Mon Jul 27, 10:41:00 PM:
Well, that vacant housing should be fast shrinking.
In my town here, Battle Creek is planning to demolish 150 homes. More to follow. The city gov. is trying hard to end blight and so as the minorities spread, the whites flee with the money, and the homes----well, they become a nuissance, and the community organizers here organize people to demand their demolishment. The city owns about 2000 vacant lots and will be adding more.
We are doing our part here to help solve vacant housing---demolish them. That will improve numbers!!!!! That's how its done!
By , at
Tue Jul 28, 08:30:00 PM:
I am trying to get permission to send you a copy of Chapter Two of Thomas Schelling's Book, Micromotives and Macrobehavior (which you would enjoy reading, I think - the book that is).
FM Scherer at Harvard recommended it (knows Schelling) and it's pretty good.
He (in passing, as he does everything) covers the subject of how a substantial increase in the rate of addition to the housing stock over a few years will lead to a significant depression in the rate of building thereafter. Among other things.
No surprise. Great factoid for those looking.
How's your home project in P-ton?
